Applied Corporate Strategy

APPLIED CORPORATE STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY..................................................................................................................................2
PESTLE analysis for Zara...........................................................................................................2
Porter’s five forces analysis for Zara-.........................................................................................5
Resources and competences........................................................................................................7
Strategy evaluation by using SAFe............................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Corporate strategy is hierarchically the best strategic plan of company, which defined
business overall aims as well as directions and way in which can be achieved within strategic
management activities. The current report is based on Zara, is one of the most popular clothing
brand in the world. This study explain PESTLE and Porter’s five force analysis, it also define 4
strengths and 1 weakness of company. Furthermore, this report justified strategic evaluation by
using SAFe model.
MAIN BODY
PESTLE analysis for Zara
It is one of the best strategic management method or tool specially utilized to determine,
monitor, examine and organize key external factors that can have positive or negative impact of
specific sector or companies. It stands for political, economical, social, technological,
environmental and legal factors that affect overall growth and productivity of particular industry.
Here, this tool is used in context of Zara as one of the most famous and popular brand in the
world. After using this method, companies are able to take better action or strategic decision
because it gives appropriate outcomes that help in further decision making process.
Political factors-
Political stability or instability in overseas markets, government policies, trade
restrictions, foreign trade policy and tax policy are included in this factor which affect might be
negatively or positively on company. Zara is a Spanish brand that was developed out of EU and
has effectively established operations all over the globe. Free trade agreements in nation impact
on organization production and sales operations positively, this can be analyzed as opportunity
(Liaqat, 2019). It helped boost company UK sales and their overall group sales rather than
before. With Free trade agreements of Europe, Zara is able to t move their products freely
between European nations with no border traffic and no restrictions on quantity or quality of
exported and imported goods and a common custom traffic for items exported as well as
imported to other nations. EU being UK’s largest export market for clothing & textiles accounts

for 74 percent of their exports; hence Zara can reach more consumers in more EU countries
without additional border traffic which has boosted their sales.
Economic factors-
Economic growth, inflation rates, disposable income of consumers, interest rates,
exchange rates and unemployment rates are included in economic factors that affect firms and
their businesses performance. Highest unemployment rates within Europe put negative impact on
Zara productivity and profitability (Roos and Shroff, 2017). As mentioned above, this
organization is Spanish brand, since Spain has one of the top unemployment rates in country, it
means that is has a mostly low cost of labor, especially in comparison to other western European
nations such as UK, Germany and France. Organization manufactures a good fraction of their
items in Spain, so their low worker cost permits them to decrease costs and in doing so, improve
profitability. Again, low cost of employees in nation is definitely a positive for this company. It
is an opportunity for organization to hire new applicants from talent pool.
Social factors-
Population growth rate, career attitudes, lifestyle attitudes, health consciousness, safety
emphasis, cultural barriers, income and age distribution are included in social factors. This
dimension of normal environment represents demographic customs, characteristics, values and
customs of population within which company operates. These factors are really very essential for
Zara when targeting target market. Online shopping trend is one of the social factors that impact
on organization operations positively (Bui and Muñoz Martinez, 2019). It gives opportunity to
gain attention of new consumers and increase sales by offering products via online app. There is
no doubt that it is major trend in 21st century. With online strategy, Zara is capable to sustain
within marketplace for longer, they can attract new consumers towards purchasing their best
products collections. People prefer to purchase or order their garments with tap of a button that
means via using online shopping sites where they get range of clothing collections. So, it can be
said that this social factor impact on Zara in positive way.
Technological factors-